ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -If the number is equal to 1, elasticity of demand is unitary. In other words, quantity changes at the same rate as price.

Detailed explanation-2: -If a good’s price elasticity is 0 (no amount of price change produces a change in demand), it is perfectly inelastic. If price elasticity is exactly 1 (price change leads to an equal percentage change in demand), it is known as unitary elasticity.

Detailed explanation-3: -Unitary elasticity means that a given percentage change in price leads to an equal percentage change in quantity demanded or supplied.

Detailed explanation-4: -Any rise or fall in the price of a commodity, the quantity demanded remains the same. The elasticity of demand in this case will be equal to zero.

Detailed explanation-5: -Unitary elasticities indicate proportional responsiveness of demand. In other words, the percent change in quantity demanded is equal to the percent change in price, so the elasticity equals 1.